Although growth in 1Q18 appears to have decelerated slightly from the pace seen in the prior three quarters, we expect this slowdown to be temporary. Our forecast for a 2.9% advance for the whole year is unchanged. The Federal Reserve noted in their March statement that the outlook for the economy has strengthened compared to their January projections, and raised the target rate to 1.5-1.75%. We expect the Fed to continue removing monetary stimulus with three more hikes this year. Trade policy presents downside risks to our baseline scenario, in particular with the US-China tariff spat escalating of late.
The Economic Outlook series provides monthly updates on the outlook for the global and US economies, and quarterly updates for China and Canada.